George Gillett and Tom Hicks’s ownership of Liverpool will lead to the pair losing 140 million pounds ($222 million), the team’s chairman said after agreeing to sell England’s most successful soccer club to John W. Henry’s Boston Red Sox holding company.
Hicks and Gillett have mounted a legal challenge to block the 300 million-pound sale of the 18-time English champion. It was agreed on by the other three members of the club’s board, including Chairman Martin Broughton.
Colorado-based Gillett and Texan Hicks yesterday tried to fire the team’s Commercial Director Ian Ayre and Managing Director Christian Purslow in an attempt to derail the sale because they felt it undervalued the team.
“They’ve invested about 140 million pounds of their own money in this and they’re losing it all,” Broughton said in an interview today. “This was actually their last chance to leave Liverpool with their heads held high. The legacy has not been a healthy one. That they’ve chosen to go out in this manner I think is sad.”
There was a 144.4 million-pound loan to the club from the owners, according to the latest accounts.
Nicola Howson, a spokeswoman for the owners, didn’t respond to a voicemail seeking comment. Mark Semer, a spokesman for Hicks, was unable to immediately respond to a call.
Broughton and Barclays Capital were hired by the club in April to search for new owners as a condition of Royal Bank of Scotland Group Plc’s agreement to extend a 237 million-pound loan facility. With the debt due to mature next week, Henry’s New England Sports Ventures fought off the challenge of a rival bidder.
Liverpool supporters have protested against Hicks and Gillett for much of their tenure because they raised debt against the club to finance their 219 million-pound takeover in February 2007. Broughton said the new buyers won’t be leveraged.
“This is cash coming into the business from a corporation that does not itself believe in leverage,” he said. “This is cash coming in as equity, it’s writing off the whole of the 200 million of acquisition debt and gets us down to the normal levels of working capital debt.”
Earlier this year Hicks said he expected Liverpool to sell for as much as 800 million pounds before reducing his estimate to 600 million. Yesterday the owners released a statement saying the two offers considered by the board “dramatically undervalue the club.”
It may take a week for the legal obstacles to be overcome, Broughton said, adding he was confident about his and the remaining members of the Liverpool board’s position.
“They agreed to give me a written undertaking that I was the only person who could change the board,” Broughton said. “They gave me a written undertaking that the sale would take place at the U.K. holding company, of which the board would be five. It would be the board that could sell and I had the casting vote.”